PETALING JAYA: Boustead Plantations Bhd’s net profit for the first quarter ended March 31, 2022 jumped 35 times to RM435.16 million from RM12.23 million a year ago, which includes a gain on disposal of Kulai Young land of RM364.1 million.
Excluding the gain, the operational unaudited pre-tax profit of RM145.4 million surpassed RM19.3 million achieved in the corresponding quarter last year, attributable to the higher palm product prices paired with improved fresh fruit bunch (FFB) production.
Its revenue grew 89% to RM324.16 million from RM171.94 million previously due to the increase in palm products prices and FFB production.
It declared a first interim single tier dividend of 7.3 sen per share.
The group’s profitability is mainly driven by crude palm oil (CPO) price, crop production, Plantation Performance Improvement Programs (PPIP) and Boustead group’s Reinventing Boustead strategy. Both PPIP and Reinventing Boustead strategy are currently progressing as planned.
It said prices of palm oil is expected to remain strong for the remaining second quarter of 2022 in respect of the ongoing Ukraine-Russia conflict and the tightness of CPO production that would dampen the increasing demand of edible oil. However, the sentiment on Indonesia lifting the ban on export of palm oil products will add bearishness to the palm oil prices.
Palm oil supply is expected to improve over the second half of the year due to easing of labour shortages with the entry of foreign workers back to Malaysia. Market is expected to stabilise earliest in July 2022 and palm oil demand set to increase due to the good price spread between soybean oil, also on the switching application of sunflower oil to palm oil in relation to European conflicts.
“With Covid-19 attaining endemic phase, we remain positive and expect that local consumption will increase gradually with higher demand from hotel, restaurant and café segment.
“The group is encouraged by the bullish price trend and encouraging crop production in the first quarter of 2022. The group will remain focus on PPIP to further improve the productivity in the coming quarters to take advantage of the strong CPO price. PPIP main initiative is on mechanisation and digitalisation, in line with the Boustead Reinventing strategy. The group expect to realise more benefit in the coming months from effort on mechanisation,” Boustead Plantations said.
